Will Virginia Continue to See Downward Slide in Gas Prices?

Gas Prices
hand at gas pump

VIRGINIA BEACH, VA (January 17, 2017) – Gas prices have dropped in Hampton Roads for the last few days with the current average price at $2.20. This is a three cent drop from last week, but still an 11 cent increase from last month and a 52 cent increase from last year. Whereas, Virginia’s average price for gas is $2.21 which is three cents less than last week, nine cents more than last month and a 48 cent increase from last year. The slight decrease in retail prices can be attributed to less demand and adequate supply, but this downward dip may only be temporary as the market awaits OPEC’s December monthly output report which is due out later this week.

Markets continue to react to OPEC’s oil production agreement, as participating countries implement cuts. Tuesday saw petroleum futures rise following remarks by Saudi Arabia’s Energy Minister Khalid alFalih, who said that Saudi Arabia would adhere to the output agreement. He also is confident that the agreed upon production cuts would rebalance the market. Under last fall’s arrangement, OPEC, Russia and other non-cartel members pledged to cut oil output by nearly 1.8 million barrels per day for six months. Energy Minister Falih went on to say that if all countries continued to abide by the OPEC agreement the market would be rebalanced and it would not be necessary to further limit production beyond the six-month agreement.

These comments follow reports that Saudi Arabia has cut production by more than the 486,000 barrels per day. Traders will continue to keep an eye on oil supply and demand as OPEC and non-OPEC countries implement the terms of their agreement. At the closing of Friday’s formal trading session on the NYMEX, WTI was down 64 cents to settle at $52.37 per barrel.

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